Effective Date of Termination and Conduct-Related Summary Dismissals

Posted on July 6, 2018

With certain limited exceptions, an employee generally needs to have two years’ of continuous, unbroken service to bring a claim of unfair dismissal against his or her employer.

Nevertheless, where the employee has been dismissed just short of the two years’ continuous employment necessary to bring a claim of unfair dismissal, he or she may build up the necessary time through his or her notional notice period if that notice period would carry him or her up to (or over) the necessary two years’ continuous employment.

However, the Employment Appeal Tribunal (EAT) has recently published its judgment in a case that provides quite a large proviso to this rule in the context of a summary dismissal having taken place.

In the case of Lancaster & Duke Limited v Wileman, the employee had been summarily dismissed without notice two days before what would have been her two-year anniversary working for the employer. Her dismissal had arisen as a result of her conduct, which was alleged by the employer, her former colleagues and also by third parties to be “offensive”. The employee also had a very strained working relationship with one of the owners of the business and had ultimately helped to disillusion another employee towards the employer (even though that employee had already resigned).

At first instance, the Employment Tribunal had held that the Claimant’s continuous service with the employer should be built up to cover her notice period of one week with the employer, granting the Claimant a total length of continuous service with the employer of two years and five days, which more than qualified her to bring a claim of unfair dismissal.

The employer subsequently appealed the decision of the tribunal to the EAT.

The EAT allowed the appeal, holding that the Employment Tribunal had erred in its judgment. This was on the basis that, whilst Section 86(1) and Section 86(2) of the Employment Rights Act (ERA) 1996 provide the minimum notice periods for termination of an employee’s employment (subject to any more favourable notice period that may be contained in the contract of employment), Section 86(6) ERA 1996 provides that the notice periods can be treated as being void by either the employer or the employee based on the conduct of the other party.

Even further, Section 97(2) ERA 1996, which allows the minimum notice period to be added on to reflect the effective date of termination (i.e. the true date of termination after taking into account any minimum notice period that should have applied), takes the whole of Section 86 ERA 1996 into account when calculating the effective date of termination, including Section 86(6) relating to the conduct of the parties.

As the Claimant’s summary dismissal had arisen out of her conduct, the EAT held that she was not entitled to build up her length of continuous service to be two years or more and, therefore, she was not able to claim unfair dismissal.

The EAT therefore remitted the case to the Employment Tribunal to consider whether the Claimant may have any claims arising out of common law, rather than the statutory claim of unfair dismissal, which was not open to her.

Comment

It is interesting that this is the first time that this issue has been determined by the EAT, particularly considering the fact that so many other matters that are essential to the ability to bring an employment claim (not least the calculation of limitation periods as a result of time spent in ACAS Early Conciliation) have been considered before.

In deciding this claim, the EAT observed that the ability to build up an employee’s continuous employment through his or her minimum but withheld notice period in order to bring a claim of unfair dismissal following a summary dismissal had purely been “assumed” in previous cases involving summary dismissal as the point had not been argued before the EAT.

Subject to any subsequent decisions, either from the EAT or from a higher court overturning this decision, an employee who has been summarily dismissed on the grounds of his or her own conduct and who has less than two years’ continuous service therefore cannot then build up that continuous service through his or her minimum but withheld notice period to be able to bring a claim of unfair dismissal.

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